NBC "Meet the Press" - Transcript: Detroit Bankruptcy

Interview

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DAVID GREGORY:
Excuse me, sorry. New Orleans, my apologies. We're going to talk about Detroit in distress, the city becomes the latest and largest to file bankruptcy. Did the politicians fail the Motor City? I'm going to talk to Michigan Governor Rick Snyder. Also, his predecessor, former Democratic Governor Jennifer Granholm, she'll weigh in. And our roundtable is here to talk about the larger question: Is there something Detroit can tell us about America's fiscal future. That's coming up after this short commercial break.

DAVID GREGORY:
Our political roundtable is here, and I'll talk to them in just a moment, but I want to begin with Michigan Governor Rick Snyder. Governor, welcome.

GOV. RICK SNYDER:
Thank you, David.

DAVID GREGORY:
The historic filing of bankruptcy by Detroit is such a big story, and I was immediately drawn to something you said back in June of 2011, and I'll put it up on the screen. The headline: "Bankruptcy Not an Option for Cities, Governor Snyder Says. Governor Snyder said that he won't let Detroit, or any other Michigan cities, declare bankruptcy. 'Detroit's not going into bankruptcy,' Snyder told reporters. 'We're going to work hard to make sure we don't need an emergency manager and bankruptcy shouldn't be on the table.'" So what happened?

GOV. RICK SNYDER:
Well, we worked hard on the process because, again, that's something to be avoided, and it's not something I'm happy to be in this situation. This was a very tough decision, but it's the right decision because ultimately the issue we need to do is to get better services for the 700,000 people of Detroit.
The citizens of Detroit deserve better than they're getting today, in addition to dealing with this crushing debt question. We went through all the other processes we could; there were no other viable options. And once you go through every other option, then you should consider bankruptcy.
We're at that point. I believe it's the right thing to do now because the focus needs to be dealing with this debt question. But even more importantly, David, the citizens of Detroit deserve better services.

DAVID GREGORY:
Yes. And--

GOV. RICK SNYDER:
58-minute response times on police calls.

GOV. RICK SNYDER:
That's absolutely unacceptable.

DAVID GREGORY:
We have some of those stats. You have 58 minutes average response time for high priority calls; 50% of the parks closed since 2008; 40% of the streetlights don't work. How have politicians let the Motor City down?

GOV. RICK SNYDER:
Well, again, if you look at it, this is 60 years of decline. This has been kicking the can down the road for 60 years. And my perspective on it: Enough is enough. I think there needs to be more accountability in government. And part of the issue here is let's stand up and deal with this tragic situation and take care of the citizens, and that's what this is all about.
This was drawing that line to say, "Let's stop going downhill," because if we hadn't declared bankruptcy, every continuing day Detroit would have gone farther downhill. This was an opportunity to stabilize Detroit, and even more importantly, longer term, I'm fairly bullish about the growth opportunities of Detroit. There's many outstanding things going on in the city with the private sector, with young people moving in the city. It's got great opportunities. The last major obstacle is the city government.

DAVID GREGORY:
You've got $18 billion in debt. A friend of mine I talked to said, you know, "Is this America?" Look what's happened. How do you recover? You've got some 20,000 retirees there who rely upon pension checks, which is grossly under-funded. How do you find a way back? How does a city like this turn itself around?

GOV. RICK SNYDER:
Well, you get honest about it, to start with. Again, that's about accountability, and putting the facts on the table. And that's been a big part of this exercise is, in many cases, for the last 16 years, people have ignored the realities of the situation. We're being real now. We're putting those facts on the table. And the retirees, I empathize with them. I mean, there are a lot of good, hard-working people that worked for the city that are--

DAVID GREGORY:
Can you possibly--

GOV. RICK SNYDER:
--on a fixed income.

DAVID GREGORY:
--make good on all those commitments made to retirees for these pensions?

GOV. RICK SNYDER:
Well, let me put it in perspective for you. One of the things that bankruptcy does allow is a positive in the sense that we were talking with a lot of creditors that one of the issues that weren't being represented well enough were the retirees. So proactively, in the bankruptcy petition, one thing that we're asking for is the judge right upfront to appoint someone to represent the retirees. They need to be at the table. They need to have a voice.
And the other thing, I want to really speak to the retirees themselves now, is to the degree the pension plans are funded, that doesn't affect us at all. The bankruptcy is about the unfunded portion of the pension liability, which is still significant. I don't want to underestimate it. But the funded piece is safe. The real question is how do we address this unfunded piece. And if you go back in history, it's an ugly history of how this pension plan was managed and all the issues--

DAVID GREGORY:
As is the case in a lot of different cities. The role of federal government is an obvious question here because the federal government has intervened when the auto companies needed a big bailout. You go back to the 1970s and that famous headline of the New York Daily News when New York City was in trouble was this: "Ford to City: Drop Dead."
Here are some of the facts about the auto bailout and about the current debt that Detroit has. You had $80+ billion that flowed to the auto companies when they needed help; now you've got a total debt in Detroit of $18 billion. Is there not some money that should be available, even from that initial bailout money to the auto companies, to help the city?

GOV. RICK SNYDER:
Well, I'm not going to speak for the federal government. What I want to speak to is a solution, and I view they can be an important partner in solving problems. I'll give you one illustration of tangible things we're doing, because this isn't about just writing checks. This is about improving Detroit.

One thing I'm proud of is that we're partnering with the federal government, the city, and the state working together is blight removal. We're going to be starting to implement a $100 million program to remove some of those 78,000 blighted structures in Detroit, hopefully within the next 30 days. That's one of the positive steps. So we don't need to wait for all the bankruptcy end. We're moving now on improving Detroit and getting better services for those great people.

DAVID GREGORY:
All right, Governor, we'll be watching. Thank you very much for your time here with us today as I'm going to make my way over to our roundtable where we will hear from, among others, the former governor of Michigan, Democrat Jennifer Granholm. I want to consider and try to understand the way politicians speak about Detroit, how they've always done it. Consider this, from President Obama, from October of last year.

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